Dive Brief:

• As of the third quarter of 2025, multifamily delinquencies reached 1.37%, its highest level since the global financial crisis era in 2010, according to new CRED iQ data reported by community, commercial and savings banks.
• Loans 90 days or more past due, which CRED iQ considers serious delinquencies, represent the overwhelming majority of stressed exposure at 1.09%, or roughly $7.1 billion, as of Q3 2025. Early stage missed payments, those between 30 and 89 days, stand at 0.28%.
• The percentage of early stage delinquencies suggests that the pipeline of new stress is not yet overwhelming, according to CRED iQ. However, it says the “accumulation at the severe end of the spectrum” is concerning because borrowers have exhausted short-term remedies and lenders now face resolution decisions.

Dive Insight:

During the low-interest-rate, abundant-capital and strong-rent-growth era from 2017 to mid-2022, multifamily overall delinquency rates stayed between 0.23% and 0.39%, according to CRED iQ. 

However, that ended when the Federal Reserve acted in 2022. Multifamily delinquency climbed to 0.4% by Q3 2023. By Q3 2024, it hit 0.97%, before jumping to 1.37% in Q3 2025 — a 3.4-fold increase in two years. 

CRED iQ Founder and CEO Mike Haas told Multifamily Dive that he expects to see distress “keep ticking up and up” due to issues with floating-rate loans taken out in 2021 and 2022. 

“Their [apartment owners] operating expenses are going up — taxes, insurance and general repairs and maintenance,” Haas said. “The cost of everything has gone up, and revenue is not going up to match that. So the borrowers are feeling the strain.”

In Q3 2023, the total delinquent multifamily loan balance was approximately $2.4 billion. By Q3 2025, it had increased by $6.5 billion to nearly $8.9 billion.

As delinquencies increased, so did bank-reported multifamily loss rates. From 2017 through 2021, they were effectively zero. Those losses rose to 0.08%, or roughly $504 million, by Q3 2024 before hitting 0.14%, or $911 million, in Q3 2025.

During the global financial crisis, losses peaked around 1.24% in late 2010, with delinquencies exceeding 5.7% at the cycle’s worst point, according to CRED iQ. It took four or five years for loan losses to fully materialize during that era.

However, today’s delinquencies are compressing more rapidly due to higher floating-rate exposure, rapid cap rate expansion and value declines concentrated in specific markets and vintages, according to Haas.

“If you're buying assets at a high price and the price of debt has gone up, there just needs to be a reset, unless you could somehow raise rents and increase your ROI,” Haas said. “That's the only way out.”

But rents have been plateauing, meaning delinquencies will rise, creating opportunities for investors. Some multifamily firms are gearing up to buy troubled properties.

In January, American Landmark Apartments completed the first close of American Landmark Fund V, raising approximately $400 million in equity commitments. The fund will have buying power in excess of $3 billion and will target mid-priced, income-producing class A and class B market-rate assets, including those facing some level of distress. 

“Over the last two years, we saw lots of distress, but primarily in the class C apartment category, which was not of interest,” American Landmark CEO Joe Lubeck said at the time. “We’re now seeing that there are some of these builders who are unable to stabilize or refinance without bringing cash to the table because their leverage was too high. As a result, we’re seeing opportunities to buy.”

Also in January, Neighborhood Ventures launched Opportunistic Fund II, a $25 million vehicle that will acquire five to eight distressed multifamily properties across high-growth U.S. markets, including Denver; Tampa, Florida; Salt Lake City; Charlotte, North Carolina; Dallas; and Phoenix.

Neighborhood Ventures plans to renovate, stabilize and eventually sell those assets after a hold period of approximately four years as overall market fundamentals recover.

“It’s not broad-based distress like the GFC,” CEO Jamison Manwaring said last month. “But it’s buildings that were bought in 2022. If the groups have short-term debt on them, those buildings are underwater.”

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